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Does education reform hold the key to addressing the problems facing Canada's first nations communities? The federal government certainly seems to think so. And, at first glance, they might be right.

Last February, a national panel – convened by the Harper government and the Assembly of First Nations – released a report that puts into stark focus the plight confronting first nations students across the country.

According to its findings, schools on native reserves lack libraries, computers, and even running water in some cases. Teachers frequently leave because of low pay and limited access to basic resources. Student progress is not monitored regularly while those with special needs are often ignored. The result is that less than 40 per cent of native students graduate high school. The graduation rate in non-native areas of the country is close to 90 per cent.

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This story is crucial to understanding Idle No More. On one hand, its demands centre on the protection of land, water and treaty rights. In particular, the Harper government's attempt to relax restrictions on land development and environmental regulations has been linked to a broader assimilation policy, whereby individualism is imposed over the collective vision that has traditionally defined first nations identity. Yet, one of its leading spokespersons, Pam Palmater, has also called attention to broader issues such as housing, sanitation and education.

All of this is quite normal. Social movements like Idle No More are composed of a plethora of voices – especially young people – each with their own particular outlook and agenda. But at the heart of the movement's demands has been a call for dignity.

For the Harper government and John Duncan, the minister of Indian Affairs and Northern Development, this is where education comes in. The thinking is that if only a good system of schooling was put into place, first nations people would have the opportunity to climb the social ladder and break the cycle of poverty that continues to hold them down. Progress can be achieved with more books, more teachers and better students.

Later this year, the Conservatives plan to introduce the First Nations Education Act. This legislation will seek to implement, voluntarily, one of the more important recommendations of the panel: the creation of native-administered boards that would operate on a regional level and have power over reserve schools by assigning principals and teachers, distributing finances and crafting a curriculum, which, although it must match with provincial standards, will be inspired by a first nations focus.

The idea is not a bad one – problems can be addressed in a more efficient way if resources are put under a single umbrella. The problem is that an emphasis on education – while important – ultimately distracts from policies that could have a much wider and lasting impact.

The formation of regionally-based school boards could take years to implement. As time passes, poverty will continue to grow. Even if the vision proved successful and more students graduated, what kinds of options would be available to them? True, some might get the chance to go to university but that route often leads nowhere as far too many young Canadians are realizing. Community colleges provide practical training for jobs that are in high demand across the country – engineering, health care, and mining – but this alternative won't do much to reverse the devastation confronting reserves, at least not in the short-term.

More promising are policies that aid existing or would-be entrepreneurs by providing small loans on the model of microcredit lending programs undertaken in the Third World and, increasingly, in richer countries such as the United States.

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The main benefit of such initiatives is that they provide opportunities for the poor to borrow without having to put up collateral, a requirement that is standard at big banks. Driving this forward has been a basic but important assumption: the belief that poverty results from a lack of access to vital resources rather than some character flaw that prevents an industrious spirit from rising to the surface.

It is true that microcredit has been used to take advantage of the poor. In India, for example, hidden interest rate rises have resulted in continuing poverty, displacement and, in some instances, suicide.

At the same time, painting every microcredit program with the same brush would be a mistake. For example, in Bangladesh, where microcredit was first introduced in a serious way, the Grameen bank has helped move people – and women in particular – out of poverty. Equally important, fears over high interest rates have been mitigated by government regulation that helps prevent abuses from taking place.

As far as the first nations in Canada are concerned, there have been efforts in this direction but nothing substantive has materialized. The Aboriginal Business Resource Centre, run by Miziwe Biik Aboriginal Employment and Training, and operating in Toronto since 2007, provides small loans to budding entrepreneurs. Yet, because it lacks funds, it has only been able to make nine loans ranging between $1000 and $5000. Some have paid back the money, others have defaulted. But no judgment can be made on the basis of such a limited sample. Other lending programs with a similar focus exist but they are also small and lack money.

For first nations, microcredit would be a promising endeavour. Many do not have collateral or the savings needed to secure a loan from a bank or government programs such as Aboriginal Business Canada. The net effect is that the sense of entrepreneurial zeal that many Canadians believe is lacking among first nations is impeded by a strict commitment to traditional lending practices.

Those who see capitalism as a threat to native culture and identity ignore the fact that the pursuit of profit can be based on a variety of principles, including the notion that businesses have a duty to be socially responsible. The isolation that many of Canada's 600-plus reserves find themselves in – a reality that only contributes greater misery – will only be reduced when first nations are given the opportunity to move forward. Encouraging business development in a smart way can help make that goal a reality.

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Peter Fragiskatos teaches at Western University in London, Ontario. He can be followed on twitter: @pfragiskatos

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